Obama, Dems skirt the issue on tax hikes

By ERICA WERNER | July 11, 2011 | 3:44 AM EDT

President Barack Obama and House Speaker John Boehner of Ohio, left, meet with Congressional leadership in the Cabinet Room of the White House, Sunday, July 10, 2011, in Washington, to discuss the debt. (AP Photo/Carolyn Kaster)

WASHINGTON (AP) — Call it eliminating an unfair break, or removing an unjust loophole, or even "taking a balanced approach." Just don't call it raising taxes.

As they work toward a must-do deal with Republicans on paring trillions from the deficit in order to raise the nation's debt limit, President Barack Obama and Democrats are saying almost anything to avoid the politically toxic pronouncement that they want to increase taxes.

Republicans, for their part, are just as quick to declare elimination of the most rarefied corporate benefit a job-killing tax hike on the American people.

It's all about winning the public relations debate over the debt limit, and in turn, perhaps, gaining a more politically advantageous outcome in the resulting deal itself.

"We're at a point where there's no good tax," said Joseph J. Thorndike, director of the Tax History Project at the nonprofit group Tax Analysts. "The sort of value proposition of a tax has been destroyed, so nobody wants to say it, nobody wants to say in any fashion that they support it except, because it polls well, taxing the rich."

Taxes are hardly the only issue going through the partisan spin cycle — and emerging virtually unrecognizable — as the days tick down to an Aug. 2 deadline to raise the federal government's borrowing limit or face unprecedented default. Take Social Security. Obama is insisting he won't agree to "slash" benefits — a vague word the White House refuses to define, thus leaving room for benefits to be cut without ever saying it.

Then there's the debt limit itself. Listen to Republicans, and the whole problem was created by out-of-control spending that now demands to be addressed. Democrats, on the other hand, are more likely to cast the issue as a question of whether or not the U.S. will make good on its obligations.

But it's on taxes that the rhetoric is the most heated, and the most skewed. Analysts say that in recent decades Republicans have largely succeeded in turning taxes into a dirty word, and the government it pays for is increasingly viewed with disfavor, too. So that even while voters like some of the taxpayer-funded services they get — like Social Security — arguing in favor of taxes per se is a nonstarter.

For opponents, "it's an easy argument to win because nobody wants to pay higher taxes," said Brendan Daly, former spokesman to House Democratic Leader Nancy Pelosi and now a public relations executive at Ogilvy Washington.

Proposals under consideration include raising taxes on small business owners and potentially low- and middle-income families. You won't hear about that from Obama. Instead the president focuses on the very rich, and speaks euphemistically. Here are a few of the phrases the president has used of late to talk about what amounts to raising taxes for some:

— "What we need to do is to have a balanced approach where everything is on the table."

—"We need to take on spending in the tax code."

—"The tax cuts I'm proposing we get rid of are tax breaks for millionaires and billionaires; tax breaks for oil companies and hedge fund managers and corporate jet owners."

—"You can't reduce the deficit to the levels that it needs to be reduced without having some revenue in the mix."

And here's how Republicans respond:

—"Tax hikes on families and job creators would only make things worse." — House Speaker John Boehner.

—"The focus for us is to make sure that we are not increasing taxes on individuals who are the job creators, and like it or not, the job creators are those who can be successful in a small business context." — House Majority Leader Eric Cantor.

—"Democrats seem to think the solution to our debt crisis is to ask taxpayers and struggling businesses to reward their economic stewardship with even more money to spend as they please." — Senate Minority Leader Mitch McConnell.